THE WALL STREET JOURNAL
AUGUST 19, 2010
Investors who follow the adage buy low, sell high may want to avoid airline "bonus mileage" programs. Travelers who buy
frequent-flier miles pay about 3 cents per mile, but then they typically redeem them for tickets at 1.5 cents each—or even less.
Mileage bonus programs—in which consumers buy frequent-flier miles directly from the airline—are popular with travelers. US Airways says about 5% of its customers are opting to pay to double or triple their miles when they buy tickets, and that revenue from mileage sales was up 236% in the first six months of this year compared to the same period of 2009. Sales on AirTran Airways' program are up 40% this year, a spokesman said. Alaska Airlines said its mileage sales are "very robust" and now top $1 million a month. United says it's doing 700 double- or triple-mileage transactions per day.
American Airlines won't say how many of its customers are buying since its May launch of the "Mileage Multiplier" promotion, where ticketed passengers can pay a fee and earn double or triple the miles on a trip. But some are going in for 10,000 and 20,000 miles.
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